Thesis topic is

The main task at this stage is to modernize the structure and methods of management of the Railways of the countries, a clear separation of functions of regulation, opening the way for private sector initiatives inrailway activities and the promotion of strong competition with other modes of transport while creating equal opportunities.Efforts are being made to improve the railway. Previously, various consortia of railway companies and freight forwarders have started to operate regular container train bound for Central Asia from China, Europe and Russia. Although a few of them run in forward the message, the journey time even with the replacement of trains on the railway junctions is still competitive compared to road transport. Whenthe long-distance traffic, there are operational challenges, in particular the different gauges on the Russian and Chinese Railways, but they are solved by the operators themselves, with the support of EU institutions. Some of these modes of transportrailway administration operates the trains, and freight forwarder, part of a consortium, polarstate buys capacity trains and resells this capacity to their customers. Representatives of companies in Kazakhstan believe that the improvement most needed in improving the speed, stability, security, cost reduction and organization of high-tech services around the relevant commercial enterprises.The main identified problems with the logistics services:Monopolization of road transport: the Lack of competition in the field of long-distance road transport means that the prices are too high, and delivery is unreliable. The problem is compounded byfailure in the whole system of investments into modernization of parks of trucks.Problems of quality of work of customs agents: This is also related to the lack of competition and the need to improve quality and upgrade technology.Overhead and informal payments: Transportation, both public and private, associated with the "overhead" costs for unnecessary services, charges, and bribes, which can raise transportation costs by 50 percent or more. Estimatedworld Bank staff such payments at checkpoints on the roads can be 800-900 $ US per truck per trip.Over 70 Kazakh companies offer logistics services, among them the company's Express delivery, and Express delivery, customs brokers, freight forwarders, multimodal transporters, manufacturers and trading companies. The company's Express-delivery and courier delivery are mainly affiliates of multinational corporations, which control the internal distribution and have their own warehouses and truck parks. Domestically licensed customs brokers, freight forwarders and the multimodal carriers have a cargo through customs and deliver them to their destination; some of them offer integrated solutions. Manufacturers and trade companies have their own trucks and warehouses to manage their supply chains.A number of logistics centers provides warehousing and transportation, but warehousing capacity is insufficient, especially for perishable goods. Multimodal transportations in Kazakhstan are still in the formative stage, and because a specific normative-legal acts do not exist, the rules for each mode of transport. Apply different liability regimes. Multimodal transportation as an activity not officially recognized and thereforeeach mode of transport requires a separate contract, which increases the time and cost.Only a few freight forwarders able to offer a comprehensive (global) services, and they are mostly branches of international companies. As a result, shippers often have to enter into contracts with forwarders in eachthe country, located in the transport corridor. This creates uncertainty regarding the duties and responsibilities.Customs and border control: upgrades, but delays still plague tradersKazakhstan customs has implemented a new customs initiatives to achieve the twofold purpose of ensuring compliance with the law and accelerate the process of clearance of goods law-abiding participants of foreign trade activities, in particular through the introduction of electronic Declaration. Over the last few years the implementation of the customs reform, the government of Kazakhstan has made in strengthening the legal framework, enhance revenue collection and simplify some of the procedures of clearance of goods. Some of the initiatives on modernizationcustoms is a requirement for joining the WTO.Kazakh customs in the past few years implemented a program of modernization. Already the reforms include the use of harmonized Customs code, the development of the single administrative document (goods DeclarationTD), electronic submission and processing of declarations at seaports and major land borders. These improvements have led to significantly reduced processing time and improved collection of customs duties and taxes. However, incurrently there are two different it systems for filing goods declarations.Long lines crossing the land borders in order to fulfil the requirements of various state bodies remains a problem. Although customs is the main border authority, various ministries at the borderalso conduct inspection and clearance. They include inspection of the Ministry or authority of transport for the vehicle inspection for suitability for operation, verification of compliance with veterinary and phytosanitary measures (these may include documentaryconfirmation and sometimes physical inspection of the goods, and also sanitary and quarantine inspection). In fact, evidence suggests that customs ahead of other border agencies across all performance parameters of the logistics. Because custom takes approximately one-third of the total time of registration, this increases the importance of facilitation initiatives aimed at improving integration of border agencies. Identified problems include obtaining permits from several regulatory authorities for the entry of vehicles into China, the many points of the state border control, duplication of procedures and documents to various regulatory authorities and the lack of access to information. Customs authorities are also considering the introduction of "single window" to facilitate trade procedures. Realization of the full potential of the modernization efforts of the customs will require the simplification of trade documents. In addition, another problem associated with obtaining permits; for example, in those cases where applicable veterinary requirements, the trading company needs to submit several types of documents in the Ministry.Crossing borders by road is hampered by inconsistent interpretation and application of border procedures. Since most border crossings lack the equipment, most inspections are carried out manually.The government is actively promoting inter-Agency coordination at the borders, in particular through the introduction of "integrated control" in the main border. In 2014 the customs authoritiestook over the functions of all border authorities to verify and control, and in several centres the government has introduced scanning equipment.As exporters and importers claim that the vehicle made it difficult to cross the border, primarily because the requirements for certification and documentation are not clear. Importers also reported significant problems with the customs authorities, establishing rates based on reference prices that are much higher than the declared amount, which leads to impose higher taxes or loss of time due to inspections.To reforming customs and border controls would be effective and sustainable, it requires performance indicators to monitor progress. A study of the time of passage of customs procedures (TRS), vtmo includes the methodology for determining the time required for obtaining each regulatory body. TRS are typically used to measure the time spent on clearance of imported goodsa participant of foreign economic activity/customs broker/agent since the arrival of the goods at the port/airport/land border. In the case of export of goods the time is measured from the time when the export goods arrive at customs, prior to their dispatch from the customs control zone (defined as the time of sending of the vessel or departure of the aircraft). The time dimension of the passage, adapted to conditions of Kazakhstan is a measure necessary to establish baseline data before the reform, which will helpto assess the progress made in the implementation of initiatives to modernize customs. The required commitment of high-level, stakeholder participation and adaptive institutional mechanism.In order for Kazakhstan to achieve their potential positioning as a regional logistics center in the region, concerted efforts such as those undertaken in accordance with high-level commitments in such countriesas Malaysia and Indonesia. Reform is necessary to implement as integrated packages, and they require continuous, long-term attention to achieve sustainable results. It is instructive that all the most effective countries in terms of LPI has developed and supported a long tradition of strong public-private partnership and dialogue;close cooperation between policy-makers, practitioners, administrators and academics; a comprehensive approach to the development of transport services, infrastructure and efficient logistics; and consistent policies in transport andlogistics.However, the institutional mechanism of achievement is specific to each country and should be adapted to local conditions. Policy development involved the various government bodies responsible for transport policy and investment, trade, industry, customs and border control. In developed andemerging economies transport agencies are usually led coordination efforts, while in developing countries the bodies responsible for trade and economic development, has played a major role in promoting the reformist agenda of logistics and trade facilitation. The Ministry of logistics is not in any country. Instead,for sequential implementation using a collective mechanism, which includes the private sector. In Canada, China, Finland, Germany, Malaysia and Morocco it was introduced councils or similar coordination mechanisms stakeholders.Research questions and objectivesKazakhstan's accession to the WTO are accompanied by a wide discussionpossible consequences for the economy. In the course of this discussion emerged a wide variety of views, often associated with membership of experts from different economic groups. On the positive impact of the country's accession to the WTO expressed by those who are waiting for benefits, and opponents speak on behalf of those who might lose under the new conditions.This study proposes the construction of economic-mathematical models on the basis of which that is intended to answer the following questions:What positive and negative consequences are possible for Kazakhstan as the result of accession to the WTO?What are the forecasts of the main indicators of economic development possible?What measures should be taken to reduce negative effects and develop a positive influence the country's accession to the WTO?The construction of economic and mathematical models are expected to be held on the basis of methodologies, the analysis of which was performed in this work. The main object of study are the economic indicators of various sectors of Kazakhstan's economy.Data andMethodologyThe applicability of a particular class of models is due to specific features of the object which are determined by its inner nature or change cyclically or independence on external shocks. Overall economic growth is determined by structural factors, and to predict its possible only with the help of a model that would take into account the condition, production capacity and dynamics of different sectors of the economy. Input-output models adequately reflect the characteristics of the object and can easily adapt to institutional changes.We implemented the formulation of the optimization input-output model which allows to define a balanced set of forecasts of development of the economy. On its basis we were able to obtain macroeconomic forecastdevelopment of Kazakhstan for the period up to 2020. Because of the abundance of possible options we have considered in the calculation of those economictendencies which, at the time of the study was laid out in the official government forecasts.In the baseline period selected Q4 2015 and Q1 2016.Built version of the optimization input-output modelis the economy in the context of the 27 sectors (23 sectors of material production andservices and industries 4 intangible services).The main constraints are the balance sheets by sectors, areastransport, according to which the sum of consumption and export may not exceed the aggregate of production and importation. Some combination of these balances forms of transport-economic balance, which must be performed in any economic system: centralized and decentralized. The solution of the model shows one of the possible States of the economy in the interests of the country and of the population living on its territory.These properties balance model can successfully be used to study not only the planned and market economy. Moreover, for an economy that requires radical restructuring, this model is one of the most powerful tools (if not the only tool) prediction of structural changes in sectors.Mathematical analysis of the model shows that any (almost any) of its decision expresses the state in which the economic system takes the action of market mechanisms under certain conditions. In other words, these solutions Express the market equilibrium 27 industry-related markets. Most solutions of the model equilibrium in Walras, though not every equilibrium solution Nash equilibrium, but it allows you to explore the area of the kernel.Semi-dynamic setting of this study suggests that considering the state of the economy in the last (T-th) year of the specified period of time. The first year of the period is denoted as 0th year.Regional blocks of the model include:The Balances of production and distribution of products:where: - is the identity matrix of dimension n (n – number of industries by which the national economy);, – matrix of interindustry coefficients of material inputs (0-th and T-th year);– diagonal matrix of the rate of decline in production during the period under review; –acolumn vector of gross output by industry;– a column vector of the sectoral structure of the non-productive consumption;– total volume of non-productive consumption (households, sectors serving households and public sector); -a matrix of cost coefficients of production, on capital expenditure; -volumes of capital investments in the last year period.Let transport for certainty takes the last position in the list of industries, and– a column vector of transport goods from region r to region s has dimension (n–1)then:– dimensional matrix nx(n-1), in the last line of which is locatedcost factors of transport of the country r for transportation of products and the remaining square matrix is singular;– dimensional matrixnx(n-1), in the last line of which is locatedthe cost coefficients of transport for export, and the remaining square matrix is singular;– dimensional matrixnx(n-1), in the last line of which is locatedthe coefficients of transport cost on imports, and the remaining square matrixis a single minus sign; - vectors-columns of the export and import of products by industry.Balances of labour resources:whereis a row vector of cost coefficients of the workforce;– the active population in the region.Constraints on capacity utilization:where– a column vector of production capacity by industry.4) Regional restrictions of the foreign trade balance:where– unit vector-row (adder);– diagonal matrix of commodity rates in the global currency dimension n1;– a scalar, specifies a limit value of regional foreign trade balanceRestrictions on export-import quotas:where - the vectors-columns of the maximum allowable volume of regional export and import.Balances of capital investments for the whole period:where– the matrix of the coefficients of capital intensity on the maintenance of production and creation of new capacities;– matrix of coefficients of availability of capital investment. In the casethe linear law of change of capital investments in the matrix in the right places are T, and the matrix are the expression .To the restrictions common to the scorecard include:7) Limitation on the territorial pattern of consumption of the population:where– column vector of the territorial structure system-wide, non-production of consumption.8) Limitation of the foreign trade balance:whereis a scalar limit value of system-wide balance of trade.9) system-wide restrictions on export-import quotas:where the vectors-columns of the maximum allowable system-wide volumes of exports and imports in world prices.10) the Target function:The main results of the macroeconomic forecastThe main objective of developing the baseline forecast was to consider the possible consequences of doubling the gross domestic product of Kazakhstan by 2020, compared with 2015, while maintaining the existing system of regulation of foreign economic activity. Such a task would mean that the country's economy in 2020 will slightly exceed the level before the accession to the WTO. However, the specifics of the modern economic model of Kazakhstan, the changed nature of the country's participation in the international division of labour make the task of doubling GDP over the five-year period extremely difficult. However, the results will be more realistic, if to consider the consequences of doubling the GDP used for consumption andaccumulation. In this case, it is advisable to use two indicators: the produced and used GDP. The forecast was based on the premise that radical changes in the structure of production will not happen. However, it was expected that the sectoral structure of production will change as a result of many of the observed changes in macroeconomic proportions. Predicted, in particular: the changing consumption patterns of the population due to the growth in real income;change in the composition of the final product the ratio between consumption and gross investment in favor of the latter; a favourable change in the indicators of current material costs; changing relationships between production and exportdue to a shift of part export-oriented enterprises to the domestic market and between consumption and import in the direction of some easing of dependence on imports; the total change in the ratio between exports and imports inthe direction of reducing the gap between nimio.The main results of the calculations are as follows:GDP increases in 2020 1.74 times compared to 2015.. At the same time revealed the unrealistic doubling of GDP country by 2020, as achieving such a result requires an unreasonably high rate of decline of materials, primarily in the areas of energy and fuel saving. But the task of doubling the main target indicator is used GDP (Fund consumption and gross investment) – solddue to projected changes in the trade balance and changes in the sectoral structure of the final product;positive trade balance is reduced from 1.5to 1.1 trillion. RUB by reducing capital flight from the country and increase the inflow of foreign investment;- the consumption Fund increased 1.8 times gross investment –almost 3 times. As a result, by 2020 the share of investment in GDP increased to 28% compared to 17% in 2015, the Accelerated growth of investments due to the reduction in other, not related to the increase of fixed capital, factors of increase in output;rapidly reduced the energy intensity of production – annually, more than 2%;the annual growth of labor productivity is 5.4;the total consumption of materials of production is not reduced in connection with increase in the sectoral structure of production of material-intensive industriesmanufacturing industry.Thus, the implementation of semi-dynamic formulation of the optimization interregional input-output model allowed us to obtain a balanced forecast of development of Kazakhstan's economy up to 2020. The forecast is made in a new industry nomenclature, which reflects the growing share of intangible services industries in the market conditions. The results of the calculations were given the opportunity not only to assess the need for resources to achieve the task of doubling GDP, the scale and directionstructural shifts in the sectoral and territorial dimensions, but also to assess the degree of attainability of this goal with the existing technological level of production.It turned out that the implementation of this goal is impossible without introduction of technologies that reduce the energy intensity of GDP over this period by 1.4-1.5 times, and the reduction of the material in 1.1 to 1.2 times, reduction of labor input 1.2-1.3 times.Consequently, targets difficult to achieve on the basis of existing technology, available resources of labour and capital. This lack of competitiveness of Kazakhstan's economy needed a radical modernization of production through import of modern technologies. This result can be interpreted as the positive direction of Kazakhstan's accession to the WTO, if we start from the premise that this step will entail facilitating access to the necessary equipment.Implemented the model leaves room for further improvement with a more objective account of the actual reaction of the economy to changes in world prices. For the economy with a state monopoly of foreign trade effects from changes inworld market prices of natural and easily understandable. Simplistically, our model can be written in the form of interindustry macroeconomic model of the following form:where E - is the identity matrix; A – matrix of coefficients of direct material that contains information on available technologies of production – costs per unit of product of some industries, necessary for production of other sectors;l – vector of direct labour input of production; L – cashlabor resources; D – vector of restrictions on production volumes (due to the limits of existing production facilities either for extractive industries – limited used of natural resources); – the structure of the final product, the maximization of which is the main purpose of the functioning of the economy; p - vector that translates domestic prices to world market prices. Required variables: X is a vector of production volumes (gross output), V – the vector of exports;W – vector of import;z – maximized the volume of the final product.Mathematical properties of this model in terms of response to changes in external prices is well known:The magnitude of the effect of foreign trade activities is in direct proportion to the difference between the relative delays of production and the relative world prices (a measure of costs in this case are the estimates of the first group restrictions). This property is in complete accordance with the theory of comparative advantage Ricardo.The value of the objective function (the value of the final product) have a positive impact as the rise in world prices for the goods that are exported, i.e. produced in greater volume than necessary for domestic needs and the decline in world prices for goods subject to import. Conversely, the oppositechanges in world prices affect its value negatively.The latter property may seem trivial and just for any economy. But this is not so. Consider the extreme economy with extreme liberalization of foreign trade. In order not to complicate the mathematical formulation of the model, assuming the absence of transport costs for inter-country transport of goods. In this case, the domestic price equals the world and not depend on the sizedomestic costs of production. In terms of linear models and under the assumption that world prices do not depend on the volume of exports and imports for a given national economy, for each industry, there are only two solutions – zero or the maximum possible output (in the form of exception due to the restrictions onlabor resources in the implementation of the model for one of the branches is possible to release not at max level).But the model in the form in which it is written above, is not suitable for studying the actual responses of the economy to changes in world prices. It is necessary to introduce a new group of essential terms:(*)The symbol “>>” means that in the real economy to carry out their activities only those sectors for which the release significantly exceeds the material cost, i.e. the revenue from sales should be sufficient not only to recoup these costs, but to pay employees, pay taxes, providing income to the owner (who invested inthe production of the means). Specific required exceeding the value of revenue over costs can be specific to each country and even for individual industries, and if necessary (for specific calculations) they canto estimate with a sufficient degree of accuracy.In the selection model of the plan of foreign trade on economic criterion required in this group of constraints was not – domestic prices are set, no dependence on the world, and these limits will be executed automatically.Restrictions (*) removes a primitive argument in favor of the liberation of foreign trade from any restrictions. Indeed, the withdrawal of any significant limitations or weakening it leads to improved valuesof the objective function. A duty-free and quota – is also a limitation. Therefore, their removal or weakening should also lead to growth of GDP. Of course, some economic actors will suffer, but others will benefit more.In fact, much more complicated – the removal or changing some of the constraints leads to changes in the other constraints (in our case, constraints (*)), therefore the increase of the objective function is not guaranteed, moreover, the range of permissible decisions may change in such a way that its value will even decrease. It follows that any uniquely credible theoretical insights about the effects of changes in foreign trade conditions on the national economy can not be.For each option, such changes required the calculation of consequences, taking into account all direct and indirect intersectoral linkages. The great value has not only the ratio of domestic costs and prices world market, but also such important parameters of the economy as the sectoral structure of production, the existing structure of exports and imports, the level of employment and the possibility of redistribution of labor resources.Our experimental calculations on the level of optimization input-output model showed that for the economy of Kazakhstan, further liberalization of foreign economic relations is more likely to have negative rather than positive consequences.The impossibility of a clear answer is because many features of the modern model of the country not taken into account at the model level and purely formal conclusions unacceptable in practice.Interest in WTO issues is stimulated by the spread of modern international organization. The vast majority of countries–members of WTO, actively participates in preferential trade agreements, customs unions and other forms of economic integration, of which the highest in thisthe time is the European economic Union. Between more than 200 countries –WTO members was 259 regional trade agreements, of which 179 is applicable. In recent years, the processes of regionalization took on such proportions that the concern of analysts of the WTO. Indeed, the processmultilateral trade liberalization is so difficult and costly that governments prefer to enter into more effective agreements with historically and geographically close partner countries. Thus, the increased weight of individualas a partner at the conclusion of multilateral treaties. At the same time achieving the goal of protection from competition with countries not included in a regional trade agreement.The effectiveness of the creation of such units is difficult to assess unequivocally, because there is a contradiction regional and global performance criteria. Can prevail on one of the two known effects: the effect of trade expansion or the effect of coagulation.If the country is a member of the bloc still has not imported the product and made it myself and with less efficiency, that after the formation of the trading bloc to inefficient domestic production is replaced by more efficient and therefore cheaper exports. Creates new trade flows, that is, there is trade expansion. If the country a previously imported product from countries that are not included in the block, after the introduction of discriminatory tariffs are not members of the Union concede to yourexport sales in the country in favor of less efficient producers in the Alliance. Trade flows come from less efficient sources with higher production costs – there is a curtailment of trade.Empirical findingsAccording to Jensen and Tarr (2011), over 70 percent of the benefits expected from the WTO accession in Kazakhstan associated with the removal of barriersfor FDI in services sectors. In this regard, the accession to the WTO can be used to attract to Kazakhstan the best international service providers. WTO accession can help accelerate and increase the level of trust towards the reforms in the service sector, which Kazakhstan can receive, for example, removing certain restrictions on the employment of foreign nationals. This is especially important when you consider that the legal instability and uncertainty are perceived as main obstacles on the wayforeign investment in Kazakhstan. Joining the WTO can also fix some of the problems associated with the scale and market access, opening new opportunities for export outside of traditional markets.And, finally, accession to the WTO will contribute to the goal to diversify Kazakhstan's export, creating a transparent and more predictable conditions for access to world markets and will allow Kazakhstan to resolve trade friction with major trading partners or in new markets under the protection of the system based on established standards.Since most of the benefits expected from WTO accession in the services sector, Kazakhstan needs to carefully analyse the impact of the single market and to ensure that it does not have a negative impact on the dynamics of accession to the WTO. Giventhe agreement on the establishment of the Customs Union prior to the entry into WTO, the single market should benefit from aboriginal rights, however, the question of its compatibility with Article V of the GATS may be raised during or after the accession negotiations. In any case positionsKazakhstan, the priority must be accession to the WTO, and then you can proceed to the services negotiations in the framework of the customs Union with Belarus and Russia so that any progress in the creation of the Union had not influenced the process of accession to the WTO.In this paper, the problems arising in the modellingconsequences arising in the national economy as a result of accession to the world Trade Organization. Comparing the experience of application of normative and econometric models using cross-sectoral approach, we proposed a semi-dynamic optimization interregional inter-industry model.On the basis of this model was performed baseline forecast for the period up to 2020.. Baseline forecast was based on the assumption of doublinggross domestic product by 2020, it became Clear that these landmarks are difficult on the basis of existing technology, available resources of labour and capital, as it requires a threefold increase in investment, a significant reduction in energy intensityGDP and reduction in complexity.Hence the conclusion about the lack of competitiveness of Kazakhstan's economy and the need for radical modernization of production through import of modern technologies. This result is interpreted as an indirect argument of Russia's accession to the WTO.We also described the results of our calculations under two scenarios,providing the implementation of some well-known conditions imposed by Kazakhstan upon accession to the WTO. The first scenario involved the simulation of several variantshigher prices for electricity, gas and oil towards bringing them to the world. The second scenario included the options of liberalization on the international labour market.The calculations showed that the forced liberalization of the energy market will have negative consequences for the economy of Kazakhstan. At the same time, the easing of restrictions onthe work has had a significant positive effect, as restrictions on production capacities was more significant.Were investigated the properties of the proposed model, limiting its scope for the stated purpose and identified opportunities for further improvements by modifying the restrictions of the trade balance. From our point of view, the model provides a perspective relevant to current calculations of the effects of regional trade agreements.Joining the WTO can also promote a partial solution to the problem with the scale and market access, opening new export opportunities to non-traditional markets.Finally, WTO accession will contribute to the goal to diversify Kazakhstan's export by creating a transparent and more predictable conditions of access to world markets and will allow Kazakhstan to resolve the trade friction with the major tradingpartners and in new markets under the protection of the system based on established standards.Conclusions and recommendationsEnsuring macroeconomic stability and coherence of priorities and measures of monetary and fiscal policy.Monetary policy. The basic direction of monetary policy in the medium term should be a phased introduction of the new transmission mechanism. This will require the improvement of existing and introduction of new instruments of monetary policy, new approaches to permanent mechanisms for the provision/withdrawal of liquidity, open market operations.KZT — "commodity currency (commodity currencies). Itthe behaviour depends on the prices of exported raw materials. The purposeinnovations is the activation of the credit channelthe transmission mechanism of monetary policy andreduce the value of its currency channel. The new mechanism wouldcreate a healthy response to the decline in the price of the basicexport goods contribute to the reduction of dollarizationeconomy, interest rate volatility, speculativecomponent of the money market and, as a consequence – increaseflexibility and efficiency of liquidity regulation and conduct ofmonetary policy in General.This will require a change of the interest rate corridor the National Bank of the Republic Of Kazakhstan. Its limits areto match rates on operations of the permanent mechanism(bottom – deposits of the National Bank of the Republic ofKazakhstan, the upper limit of the loans to permanent access).The introduction of new operations and instruments withinthe transmission mechanism of monetary policy will allowto improve the management and regulation of liquidity.Monetary policy will aim atmaintaining the balance between internal and externalcompetitiveness of the Kazakh economy. At the same timeexchange rate policy will adequately respond to changesworld prices, terms of trade, creating, thus,the Foundation for the development of the domestic economy.Fiscal policy. The prevailing trendthe increased dependence of the budget on oil revenues will requireinstitutional reforms in the public sector,improve the transparency of its expenditures.In the medium term will require consolidation the national Fund to the budget accounts in accordance withinternational standards and the reduction of extrabudgetary costs in the context of increasing the degree of transparency of budgetsector.In this regard, the primary task is to increasenon-oil revenues and broaden the tax basetogether with improved tax administration in orderkeeping spending budget at a stable level.In the medium term will require improvingtax policy taxation of incomeprogressive taxation and the taxation of resourcerent.The use, in the conditions of inflation the administrativeprice regulation as a tool of protection of socialvulnerable groups, it is necessary to replace the targetedtargeted social transfers.The achievement of transparency in public spending onprogram of development and diversification in accordance with the higheststandards of efficiency will require a gradual transition tothe direction of public funds for Programsindustrialization and diversification through the budget.Loan programs through quasi-fiscal organizations andcommercial banks will require careful planning and monitoringimplementation. Liabilities and obligations arising from lendingas well as its conditions should be the market and clearly disclosed.Industrial policy:Industrial cooperation and new combinations addedvalues in the Eurasian economic Union in the new geopolitical realities.Implementation of the policy of industrial – innovativedevelopment in Kazakhstan has not yet yielded significant effects: the share ofthe manufacturing industry has been steadily declining, oftensupported uncompetitive projects not providedraw-material base that does not have markets. Spentpublic funds and efforts are not giving tangible results("sieve effect").In connection with the implementation of the new industrialization program anddiversification of the economy of Kazakhstan is of special interest for our countrymay present policy of import substitution in Russia. But shewhile fraught with a number of internal complicating factors:the lack of investment in terms of restrictions on externalfunding, long-term shortage of workers(the demographic "pit").New realities give the chance to Kazakhstan to useintegration potential of the Eurasian economic Union and to give new impetus toKazakhstan's industrial policy taking into account the demand of the Russianmarket for substitutable technology products. More stable and liberal business climate in Kazakhstancreates a new format of investment contracts with investors withstate support measures:the principle of "stability" of the legislation in the tax andenvironmental spheres, as well as projected long-term ratesaccording to major SEM;implementation of the principle of "one window" for investors, the introduction ofthe Institute of investment Ombudsman and others.The involvement of skilled technical personnel fromRussia, and possibly from Ukraine, will give an impulse to the increasecompetition in the labour market, increase of training of domesticpersonnel, emergence of new technical professions, and increasingthe scientific and technological level of the country and developmentthe processing industry of Kazakhstan on a new level.The implementation of the new industrial policy will requiretechnology audit and assessment of potentialthe possibilities for the creation in Kazakhstan of joint orKazakh-Russian enterprises for the production of substitutedthe types of technical products or industrialorders available the Kazakhstan machine-building enterprisesand Metalworking.This will require focused collaborationThe Eurasian economic Commission, mid, MNE RK, institutionsdevelopment of Kazakhstan, the MAYOR of the Russian Federation, Ministry of industry and trade of the Russian Federation etc.Strengthening market motivation quasi-publicsector and development institutionsIn addition to the guaranteed transfer from the NF to the budget of the countrysignificant additional support to the economy havethe National Fund and Republican budgetsent to the quasi-public sector and institutionsdevelopment.So for 2009-2013 for the implementation of investment projectsJSC "NWF "Samruk-Kazyna from the national Fund and the RB was allocated 2767,62 billion tenge( about 18.6 billion U.S. dollars).For 2009-2013 for the implementation of investment projects of JSC"NMH "Baiterek" from the NF and RB was allocated 96,62 billion tenge(about 650 million U.S. dollars).For 2009-2013 for the implementation of investment projects of JSC"NMH "KazAgro" from the NF and RB was allocated 87,45 billion tenge (about580 million U.S. dollars).The low share of foreign and private domestic investmentin relation to the National Fund and Republicanthe budget indicates a low level of attractiveness supported government investment projects to independentinvestors.Require an audit of ongoing and planned investmentprojects financed by the National Fund forcompliance with market principles of transparency, efficiencyand repayment.Industrial policy in metallurgy sector (thisthe sector occupies about 30% of all manufacturingindustry).In recent years, a new and adversefor Kazakhstan trend: declining exports to China readyproducts in the steel and flat rolled and growing exportraw materials in the form of metal ores. China is actively expandingown the production capacity of steel products andKazakhstan consumes more ore, not the finishedsteel products. Active deployment of its ownhigh metallurgical production in China amid pricethe lack of competitiveness of products of the Arcelor Mittal mayto encourage a simple export from Kazakhstan ore, not the finishedproducts.This can become for Kazakhstan a big "step back" tothe de-industrialization of the country. The reason for the declineproduction of Arcelor Mittal is seen not only in reducingprices and world demand for metals, but in the aging and lowtechnological and economic efficiency of production(depreciation of fixed assets in the industry – over the past 4 years has grown from38 to 42%).Action:to initiate measures for the modernization of the mainthe technological process at the enterprises of metallurgy;to increase the state order for metal productsthe expense of projects of SPIID-2;to amend the "Tax code" simplificationprocedures of VAT refund.The volume of production of nonferrous metallurgyvolatile. The main reasons:High degree of depreciation of fixed assets, which leads tofrequent breakdowns and downtime;Unfavourable world market prices for raw materials andmetals and falling prices: aluminium, copper, Nickel, gold, silver;The depletion of the resource base and a small number of newfields, which leads to a shortage of resources.Action:expand the state order for metal products forthe expense of projects of SPIID-2;to amend the "Tax code" simplificationprocedures of VAT refund.The formation of a stable and educated middleclassDriver long-term economic growth should bethe middle class, owing to its role as a "social stabilizer",provider of skilled labour, "economicdonor", the main employer that determines politicalbenchmarks of the state policy.The package of measures must include measuresstimulating further growth of the highly skilledhuman capital and increase productivity.For the purpose of maintaining production activitiesenterprises, employment, and stabilizing the middle class,consider the following package of short-term andlong-term measures.Potential rich resource base of Kazakhstan can be used to support structural reforms in Kazakhstan and deepening of the development. At the same time, the country faces a change in the structure of world trade and investment, as well as to changes in the political environment in the sphere of regional trade as a result of joining the WTO. In order to take advantage of the opportunities, Kazakhstan should: find a balance between the efforts for regional integration within the Customs Union with Russia and Belarus and the common economic space and on international integration in the framework of accession toWTO and maximize the benefits of each type of integration; to develop competitive commodities sector by providing strategic support for the sector, coupled with parallel efforts to develop trade;to build effective services by increasing competition and transparency to the world of knowledge and of professional personnel, and (iv) to develop a comprehensive program for the development of trade and competitiveness, along with development of institutional capacity to implement this program.Development and effective implementation of the integrated development program for trade and competitiveness is a task that can be done in the medium and long term. 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